Technical Abstract:
Health and environmental concerns have fueled increasing societal interest in organic agriculture. At the same time, economic performance is a primary consideration for farmers in choosing a production system. We address the feasibility of producers meeting society’s growing interests by comparing economic returns, over a ten-year period, for five grain farming systems (two conventional and three organic) maintained at the USDA-ARS research station in Beltsville, MD. In this long-term experiment, conventional systems differed from each other in tillage regime. Organic systems differed from each other in length of rotation and thus number of crops grown. Organic and conventional systems differed from each other in length of rotation, fertilizer and pest control practices, and the use of cover crops. Costs assigned in enterprise budgets included input materials, equipment operation and ownership, and labor. Present values of returns to management were calculated for each crop in the five systems, and for each system. Analysis was carried out once using conventional prices only, and again using organic price premiums for organic crops after a transition period. Not all crops had positive returns each year, and organic systems brought lower annual returns than conventional ones in the absence of organic price premiums. However, on a long-term basis, all systems had positive net present value. In the absence of organic price premiums, returns to management are greatest following a conventional no-till regime. In the presence of price premiums for organic grains, organic production brings greater returns to management than conventional. Future work will include measures of social accounting, such as social costs pertaining to environmental degradation, or benefits from environmental stewardship.